A Perfect Testbed For Your Startup: Graz

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Graz, Austria’s second biggest city with around 300.000 inhabitants, has a lot to offer. This is what you and your co-founders will certainly appreciate!

Graz is not only known for its UNESCO World Heritage Sites (the medieval city center and the castle of Eggenberg) and having been the European Capital of Culture in 2003, but in 2001 it became the first European City of Human Rights and since 2011 it has been designated as a UNESCO City of Design. An honour shared together with Berlin, Montreal and Buenos Aires and only twelve other cities worldwide. It provides lively, motivational and creative surroundings for you when starting your business – combining history, modern architecture and design, innovative companies, entrepreneurs and six universities with some 50.000 students. In addition, Graz offers a plethora of cultural festivals and events throughout the year, a big selection of restaurants and bars, as-well-as a variety of sports and leisure activities nearby. The city will welcome you warmly – not only because of the 2.100 sun hours a year, but also because of the open-minded people and the growing startup community.

The Capital Of Styria: Graz

Advantages Of Starting-Up In Graz:

  • You are in the heart of Europe, an ideal location to connect with the West through to the East of Europe.
  • The startup community is still relatively small, however, it is active and growing. It is easy to get in touch with others and find the right people with whom to network, to exchange experiences and to support you and your ideas.
  • The startup community in Vienna is just a short bus, train or car ride away – so you can participate in events in Vienna whenever you like and then return to Graz, where you can get your work done!
  • Living costs in Graz are much lower than in other larger cities. You can also reduce your business running costs e.g. with the financial aid offered by the City for a place in a co-working space.
  • The Austrian government has started an initiative to support startups (#NoSleepTillGruenderlandNo1) with a new crowdfunding law, allowing higher investments with low information duties. The next step will be to have tax relieves for risk-capital investors.
  • Do it like the big companies: Austria is a popular test market for new products – from detergents to mobile phones. Graz and Austria as a whole provides an ideal test bed before you scale your company and enter new international markets.
  • With some 50.000 students in the city, studying various disciplines in a wide area of expertise, you have the opportunity to find the right co-founder or your first employees. Our students are highly educated and creative people with technical, computer, business and medical backgrounds, who could be eager to shape the future together with you. A good place to contact students interested in entrepreneurship is the final presentation of the ‘Gründungsgarage’ – a popular course at the University of Graz and the Graz University of Technology. The next presentation will be on the 22nd January, 2016.
  • With an interesting selection of industries and businesses, from different sectors such as automotive, medical or engineering, you might find your next cooperation partner nearby.

What You Should Consider:

  • No advantage without disadvantage – Graz and its startup scene is quite small. And so is the market in Austria. Depending on your business idea and your target group you might need a much bigger market. But even if you have a ‘born global’ startup, Austria is a good starting place – look at Runtastic or Shpock.
  • Although Graz is culturally diverse with many people commanding good English language skills, not everyone understands the English language sufficiently – especially in the countryside. Therefore it is recommended to reach at least a basic German language skill level if your ideas depend on it.
  • Despite the growing interest from the Austrian government to support founders, the bureaucracy level is quite high. On the other hand you will find help to be able to master this challenge successfully.
  • If you are thinking about founding a Limited company in Austria, you should consider that this can be quite expensive. You will need 10.000 Euro of minimum starting capital (of which 50% will have to be paid on to the company account). Despite this the costs for setting up a company are around 2.000 Euro. You should consider your obligations as a founder of a Limted company, as the bureaucracy level is higher than for other legal company forms, which may be more applicable to you and your business in the beginning.
  • When you think about being an employer you should consider that fiscal and social security taxes are quite high.

What’s Up In Graz’s Community?

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Engaging with our growing and active start up community, on a regular basis, is a great way to get in touch with like-minded people, who share your enthusiasm and your interests.

If you would like to check out events online you will find information here:

  • Check out IdeenTriebwerk Graz – an association with a mission to encourage and support the startup community in Graz: You will find information regarding not only upcoming events, but interesting news too.
  • Local Meet up-Groups, especially with an IT focus, can be found on www.meetup.com.

One of the best ways to become part of the startup community is to visit one of the regular events organised by IdeenTriebwerk Graz:

  • Every third Thursday of the month you are invited to join the Startup Spritzer – the best place to immerse yourself in the startup community. Take the opportunity to pitch your ideas and afterwards you can dive into the crowd and have interesting conversations with other entrepreneurs and people at the event.
  • Every second month IdeenTriebwerk Graz also organises the Startup Workshop, where you will find new and interesting topics covered – “Hands-on” is the buzzword at this event.
  • Twice a year, their Startup Mingle event provides an engaging networking opportunity with stimulating panel discussions, snacks and drinks and a buzzing atmosphere.

The City of Graz also offers an interesting networking and event format – the ‘Club der GründerInnen & Friends’ – offering several smaller as-well-as bigger events throughout the year. Do not hesitate to send your contact details to them by e-mail to be added to their mailing list and receive all the latest details about upcoming events.

A Number Of Larger Events Are Also Available:

  • When the trees start loosing their leaves, the time is ripe for the Startup Playground – themed “From Sandpit to Business”. Three days, 48 hours of hard work, lots of valuable mentoring, interesting pitches and the chance to convince an investor of your idea – these are just a couple of the arguments why you should not miss this event. The next one is on the 6-8th November, 2015.
  • To test your or someone else’s ideas on potential customers and to learn more about how to deploy the experimental technics of the Lean Startup movement in your personal work you must participate at the Lean Startup Machine event. It offers practical advice, as-well-as hands-on support from mentors and experts. It will next take place in January or February 2016 in Graz. Learn to listen to the market instead of building a product nobody needs – according to the motto ‘Fail Fast. Succeed Faster’.
  • Another great venue to network and to learn from other’s experiences is Barcamp Graz, which takes place every spring – the last was on 17-19th April, 2015. More than 300 participants participated, adding topics, stories and knowledge to lively discussions around the areas of wissenscamp, appdevcamp, designcamp, startcamp, politcamp and uxcamp. The startcamp will be especially valuable for entrepreneurs and startups, but do not miss out on the programs offered by the other areas as well. It might be a great opportunity to bring in your own topics and learn from the feedback of others, they could be your next customers!
  • Just before the summer holidays, Graz becomes Austria’s marketing hotspot. 1.950 Participants listened to 73 national and international speakers, a 35 hours program in 5 tracks, 15 keynotes and 44 hands-on master classes at the Marketing Rockstars 2015 conference. The next one will be 16-17th of June 2016. Save the date!
  • Last but not least, you will of course meet people from Graz’s community at the big festivals nearby – whether at the Pioneers Festival in Vienna or at the PODIM conference in Maribor.

Find Places To Work In Graz

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There are many reasons to use one of the co-working spaces in Graz. Saving costs is certainly one – which can be especially high in the first year, but can be lowered thanks to the subsidy programme offered by the City of Graz – check out the terms. However, don’t underestimate the other hard and soft factors, as there are the advantages of being part of the co-working community. The daily help and networking possibilities, the regular events, the access to professional office equipment or an equipped workshop to build prototypes are all great advantages.

The variety of co-working spaces are vast and continue to grow – you will certainly find somewhere that fits your needs, whether you like to be immersed in an open office environment, with an inspiring atmosphere, need your own little room to do your phone calls undisturbed, have to build your architectural models or need professional child care during work.

To get a good first impression of the different possibilities currently available, check out the Coworking Graz network and IdeenTriebwerk Graz’s co-working tour Graz.

Reach Out For Financial Help In Graz

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Money makes the world go round, or so the saying goes! Whilst bootstrapped founders with little money raised from family and friends can do wonders with hard work and enthusiasm, there is still truth in this proverb! Here are the best tips for how you can make the most from your funds and where you can raise additional money to grow your business.

Use Mentoring In The First Idea Phase:

  • IdeenTriebwerk Graz: The awesome team will be happy to help you with your first questions and can give you the best advice on which steps to do next and what people to meet.
  • Innolab: The vision of Innolab is to help people creating a business out of their ideas and so enhancing the spirit of entrepreneurship in the region. They offer free advice and mentoring during the initial stages of your business.
  • And check out the incubators – they will help you with words and deeds already in the Idea phase.

Incubators, Accelerator Programs & Company Builder:

  • Science Park: The publicly-funded institution has the purpose of supporting and promoting new foundations of innovative, technology-orientated business in Graz and Styria, especially, but not only for people with university backgrounds. They offer consulting and coaching, financing, free office space and infrastructure, networking and mentoring for 18 months.
  • The N4 Innovationszentrum Graz is the incubator of the City of Graz, where young creative and innovative companies will get a subsidy towards their rent during the first three years, mentoring and access to an inspiring community.
  • lab10: The privately financed incubator is focused on the critical early-idea and company phase. They offer professional support, lean methods to shorten the time to substantial investment and broad market introduction as-well-as offering office space. Depending on your goals, you can use the more intense accelerator program. The goal is to be investor ready within 3 to 12 months.
  • Up to 11 Company Builder: The company builder of the sms.at founders, concentrates on co-founding early-stage business ideas in the field of mobile and offers funding for one year, operational expertise and mentoring, office and IT infrastructure as-well-as administrative services. You can profit from their 15 successful years in mobile, their funding and investor relations and all aspects of their organisational and technical infrastructure.
  • If you wish to professionally market innovative research findings from sectors including Pharmaceuticals, Biotechnology and Medical Technology then the Life Science Incubator of the Centre for Knowledge and Technology Transfer in Medicine (ZWT) is the right place for you. They offer subsidised state-of-the-art S1 & S2 laboratories, flexible office spaces, special infrastructure for life sciences start-ups and services provided by specialised consultant networks.

Grants & Subventions:

Grants and Subventions are a great way to access cheap or even free money to start or grow your business. What you should consider is that they generally require paper work and time before the money is on your account. Even then you are not completely free to decide what to do with the money, because you have to fulfil the grants requirements. This might be an issue for businesses with ideas where speed matters or where the environment requires fast changes in terms of strategy and focus.

  • Austria Wirtschaftsservice (AWS): Check out the site of the AWS. There are different options for grants and subventions depending on your industry and your company’s stage of development and is available for Austrian projects as-well-as international ones. They made the application and collaboration easier with the online tool ‘aws Fördermanager’.
  • The Austrian Research Promotion Agency (FFG): The FFG is a national funding institution for applied research and development in Austria. It offers various services from the management of public funding programs to consulting services in all phases of technology development and innovation. The diversity of the funding programmes managed by the FFG is listed here.
  • The Styrian Business Promotion Agency (SFG): The SFG is responsible for attracting new business to Styria. Therefore they offer companies a broad range of services free of charge, such as general information and advice on grants and financing. Furthermore, they help with forging links to Styrian technology centers and centers of excellence, in addition to networks and clusters.
  • The City of Graz subsidises the rent for young businesses from certain industries – check out the requirements here.

Crowd Investing & Funding Platforms:

Crowd funding for small amounts or crowd investing for larger funds might be an good alternative to other investment forms. Additional to the money, you will certainly get direct customer feedback on your business idea, a good marketing platform and your first fans and customers. However, you need a product which will be attractive to a large number of people, in the case of investing and be financially attractive too.

  • If you need a couple of thousand Euro of seed money you could consider reward based crowd funding. Scan through successfully funded projects on wemakeit or Startnext to reconsider whether this funding form is something for your business.
  • Conda is a Vienna based crowd investing platform. Come and visit one of the local Conda Partners; Heribert Strasser or lab10 to discuss your project and the next steps for your successful crowd-investing campaign, which could see you raise anything from 50.000 Euro up to 1,5 million Euro, with little legislative hurdles.
  • Graz based Green Rocket  is the first European crowd investing platform focusing on projects in sustainability, energy efficiency, mobility and health. So if that is what your idea is about then this might be the right place for you.
  • 1000×1000 is another Graz based platform that has committed itself to write remarkable success stories with innovative ideas. They collaborate with the ideas platform Neurovation, where you could post your ideas and get the opportunity to have them become a crowd investing project.

Business Angels:

Not every idea will suit crowd funding, because sometimes it may either not be understood or it may be advisable to stay in stealth mode, whilst you develop your idea further without having competitors intervening. Business angels can be the better choice. You would not only get funds, but often you would find someone with experience and contacts who can contribute to your further business development and growth. To find the right investor for you, check out the following networks:

  • i2 Business Angels is a platform supported by the AWS connecting your business idea to the right investors.

Venture Capital Investors:

Is your business ready for VCs? One of the followings might be your best choice here in Austria:

  • Speed Invest, with offices in Vienna and Silicon Valley, was Austria’s first venture capital fund – concentrating on FinTech, Tech, Media-centric and e-commerce. Besides money they provide entrepreneurial know-how and operational experience. Just recently you could read about the successful exit of Shpock, which was part of Speed Invest’s portfolio.
  • The AWS also provides venture capital – check out their service here.
  • GCP Gamma Capital Partners is a private Venture Capital Investment and Equity consulting firm with a focus on ICT and Life Science.
  • Pioneer Ventures invests up to 125.000 Euros and supports you with access to customers, a global network, peer-to-peer learning, expert advice and last but not least a networking tour in Silicon Valley.
  • VAVE is a Venture Capital Fund based in Vienna, founded in 2015, with typical investment volumes of 200.000–250.000 Euros, investing mainly in the DACH region, the UK and South-East Asia. They focuss on E-Commerce, Transportation, Education, CleanTech and FinTech businesses.
  • Venionaire Investment is just about to raise a 100 Million Euro Venture Capital Fund and will have a core focus on A and B rounds in Europe.

Keep Going In Graz

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Have you decided to place your company in Graz yet? Your anwer is yes! That’s great – the city and the startup community is eager to get to know you.

Contact points that are helpful now are the Gründungsservice of the Austrian Economic Chambers (WKO), which will answer all your legal and administrative questions. Or the GO! GruenderCenter of the bank Steiermärkische Sparkasse, which will help you with your business plan.

There are many lawyers, notaries and tax advisors in the area of Graz. Do not hesitate to ask other entrepreneurs about their choices and experiences and make first appointments with several of them. You should make a choice after comparing the different services and prices – and we advise you listen especially to your gut feeling: trust and open discussions will be the basis for a good collaboration.

Finally, when you are ready to go international: Check out the sites of ICS Internationalisierungs-Center Steiermark or the WKO Go International.

Good luck!

 

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Last updated: July 31st, 2016

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